John Paulson made billions betting against subprime mortgages. Now, he says buying a house is the best possible investment.
If you already own a home, buy a second one. "You won't make returns that good by investing in me," Paulson told the audience at CNBC's Delivering Alpha conference in Manhattan on Wednesday.
Paulson said that back in 2006, he was aware that housing was at its peak. Now, he thinks it's still very close to the bottom.
"I think we're just at the beginning of the recovery. I think it will continue for four to seven years," he said. "It's not too late to get involved."
For the individual investor, locking in a fixed-mortgage rate is also a way to hedge against inflation down the road. He thinks it's unlikely that an uptick in mortgage rates will cause the housing market to cool.
Paulson's hedge fund, Paulson & Co., has been betting big on housing for more than a year. He says his fund has likely been the largest purchaser of undeveloped land in Arizona, California, Florida and Nevada this year. He expects the price of such land to increase precipitously, since he thinks there's not enough inventory to meet the coming demand for new homes.
The 57-year old billionaire has a knack for finding returns in the housing market, but his bets on gold haven't worked out very well recently. Paulson's gold fund has lost 65% this year as the price of gold has dropped roughly 25%.
Still, Paulson thinks gold is a winning bet over the long term. He is certain that inflation will eventually be an issue, and gold is the ultimate hedge. "The rationale for owning gold has not gone away," he said. "The consequences of printing money over time will be inflation. It's difficult to predict when."
For those who think Paulson might be a one-hit housing wonder, there's still time to measure his investing prowess over the long haul: Paulson said he's just started the second 20-year chapter of his wealth-management career. At 77, he thinks he may be ready to retire.
Bill Ackman, the activist hedge fund manager who most recently made headlines over his big short position on Herbalife, zeroed in on Procter & Gamble at the Sohn Investment Conference in New York Wednesday.
The CEO of Procter & Gamble (PG) is one busy man, but that doesn't mean he's solely focused on his work at the helm of one of the world's largest corporations.
Bob McDonald, who's led P&G MOREMaureen Farrell - May 8, 2013 3:38 PM ET
Shares of Herbalife (HLF) bounce back from a sharp drop Monday morning after the New York Post reported that the company is the subject of a federal investigation. Herbalife's stock fell nearly 13% shortly after the open but finished the day up more than 1%.
The investigation was revealed after the Federal Trade Commission disclosed a list of 192 complaints against Herbalife from the past seven years in response to a Freedom of Information Law request MOREHibah Yousuf - Feb 4, 2013 4:01 PM ET
The Dreamliners may be temporarily grounded, but one hedge fund manager is betting that aircraft makers are about to take off.
"The aerospace industry was essentially put on hold during the few years since the financial crisis, but now there is a real need for modern planes," said Dinakar Singh, founder and CEO of New York-based hedge fund TPG-Axon Capital Management, adding that he expects the industry will enjoy strong and MOREHibah Yousuf - Jan 17, 2013 4:26 PM ET
The possibility of a worldwide depression or a market crash doesn't keep Ray Dalio, founder of the world's largest hedge fund, up at night.
The world, especially southern Europe, may be standing on the edge of an abyss, says Bridgewater Associates' Dalio, but he has faith in the power of central bankers around the globe to essentially print money as needed.
"The world has a lot of liquidity," Dalio said Wednesday morning, MOREMaureen Farrell - Sep 12, 2012 2:03 PM ET
Barton Biggs, a former Morgan Stanley global strategist and pioneer of the hedge fund industry, has died.
Morgan Stanley (MS) chief executive James Gorman disclosed Briggs' death Monday in a memo to employees. A spokeswoman for the bank said Briggs died Saturday after a suffering from a blood infection. He was 79.
"Barton left an indelible mark on our business, our culture and our shared notion of leadership at Morgan Stanley," Gorman MOREBen Rooney - Jul 16, 2012 1:11 PM ET
Investors worried about Europe imploding may find solace in two new ETFs that launched Wednesday and offer portfolio protection against so-called black swan events.
Coined by economist and former derivatives trader Nassim Taleb, a black swan event is one that's highly improbable and unforeseen, like the 2008 financial crisis and Japan's 2011 nuclear disaster.
Horizons Universa Canadian Black Swan ETF and the Horizons Universa US Black Swan ETF track the S&P 500 MOREMaureen Farrell - May 30, 2012 1:49 PM ET
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